Which Currency to value Opportunity Costs in?
Missed opportunties. We have all seen them passing by. Should I worry about them in my future decision making following my learnings from the altMBA program?
Firstly, I had to get my head around a few theoretical concepts. How do Opportunity Costs («positive value given up») differ from Foregone Gains («maximized vs. actual earnings») or Losses («value decreased») and what is the meaning of Loss Aversion Theory («potential loss valued mory highly than portential reward»)?
Next, I asked myself what I considered to be of value. I immediately thought of the monetary value of something. Interestingly though, «something (such as a principle or quality) intrinsically valuable or desirable» equally represented a value according to Merriam-Webster. I called this emotional value.
So here it comes, my very own subjective value assessment as applicable to my future decision making:
1. I have discounted monetary value entirely on the assumption that I manage to maintain my average earnings above the so called «happiness plateau» in the medium term.
2. This leaves me with emotional value expressed in setting connecting emotionally, making real change, seeing patterns and worldview, finding good in others, practicing silence, easing constraints and leveraging assets available to me.
3. Having «seen and experienced» the universe of possibilities, the potential Opportunity Costs of not leading have gone up sharply.
4. The risk of Foregone Gains from not doing my best work has also increased substantially having noticed how high we can aim.
5. The Loss potential from not keeping up the discipline of shipping «good enough» regularly and consistently has become material having truly leaped like never before.
6. I feel immunized against Loss Aversion Bias as «you can’t unsee it once you see it».
So what does that all add up to?
Beware those making decision against better knowledge.
